SC AG Wilson accused of ‘cronyism’ for $75 million fee to lawyers for plutonium deal

A state solicitor is blasting S.C. Attorney General Alan Wilson for saying he will award $75 million in legal fees to private law firms that participated in getting a $600 million plutonium settlement from the U.S. Department of Energy.

“You, of all people, know that an Attorney General has no authority to direct how those funds are spent,” 1st Circuit Solicitor David Pascoe told Wilson in a letter Pascoe sent to Wilson on Thursday.

In the letter, Pascoe cited a settlement agreement that Wilson had worked out with the Department of Energy and then asserted that settlement document “does not allocate any portion of the $600 million to attorneys’ fees.”

So shaky is Wilson’s legal position in giving away that money, Pascoe said, that he hopes Wilson and state officials will come to an agreement “to avoid potential litigation.”

Late Thursday, Wilson fired back. His office responded to Pascoe’s charges and said the Attorney General had ample authority to hire outside lawyers and pay them on a contingency basis. The contract used for the outside lawyers in this case has a fee schedule long in use by the Attorney General’s Office, spokesman Robert Kittle said.

On Aug. 31, Wilson told a press conference that the $75 million in fees to be awarded to private lawyers that Wilson hired will come out of the $600 million settlement from the Department of Energy. The rest — some $525 million — will go into the state’s general fund. The money is supposed to come to South Carolina from the federal government in early October.

At that press conference, Wilson said that he knew some people might have a problem with giving $75 million to some law firms, but that the law firms had come up with an unusual legal strategy that led to the $600 million settlement. He did not give details of that strategy.

The settlement is not a legal settlement approved by a judge — it was arranged through Attorney General William Barr, who agreed to take the $600 million from a special pot of judgment money that the U.S. Department of Justice has. Barr has the authority to dispense that money.

In any event, the settlement puts to rest a years-long dispute between the State of South Carolina and the federal government about removing tons of plutonium, a poisonous radioactive material, from the Savannah River Site in the Aiken County area of the state.

In federal court records, three law firms are listed as Wilson’s outside attorneys — but a Wilson spokesman said that only two of those firms will be splitting the $75 million. The two law firms are Wilson’s old law firm, Willoughby & Hoefer, and Davidson, Wren and DeMasters, both of Columbia. The law firm that won’t be getting money is the Benjamin Mustian Law Firm, the Wilson spokesman said.

Exactly how the $75 million fee will be split has not been revealed.

In his letter, Pascoe also said he didn’t believe the lawyers had done much work to deserve $75 million in fees.

“From court records it does not appear your lawyers engaged in any discovery; I cannot find any record of them serving interrogatories; taking depositions; hiring experts; or obtaining any documents from DOE,” Pascoe wrote, saying he has scoured court records and found little.

Wilson’s office said the case moved through multiple courts and multiple appeals. “It was this litigation, handled by these outside firms, that brought the Department of Energy to the negotiating table.”

Pascoe is the second official to object to Wilson’s intention to give $75 million in fees to law firms. On Aug. 31, when Wilson announced the deal in a press conference attended by other public officials, Gov. Henry McMaster pointedly avoided showing up.

McMaster then released a letter he wrote to Wilson, objecting to the size of the lawyers’ fees and the settlement, which McMaster said gave the DOE too much time to get rid of all the plutonium now stored in the Aiken area at the Savannah River Site.

Pascoe wrote, “This deal reeks of political cronyism. The attorneys reportedly receiving this unconscionable amount of state funds are your closest political friends. Mr. Mustian’s wife works for your campaign. In addition, you worked for Mr. Willoughby’s law firm when you first ran for Attorney General.”

Pascoe forwarded copies of his letter to McMaster, legislative leaders of both parties and to State Treasurer Curtis Loftis and State Comptroller General Richard Eckstrom.

Thursday’s dispute opens a new chapter in a long-running battle between Wilson and Pascoe, who the Attorney General named special prosecutor more than five years ago to examine General Assembly corruption.

During that time, Wilson tried unsuccessfully to oust Pascoe from the special prosecutor’s job and Pascoe, a Democrat, has indicted or won guilty pleas from some of Wilson’s closest Republican allies.

Wilson’s office said there is “absolutely no cronyism involved” and Mustian’s law firm did no work on the case and will get no money.

Wilson’s office also said the Willoughby & Hoefer firm was selected because they came to then-Gov. Nikki Haley and Attorney General Wilson in 2016 with the legal strategy for this case.

Wilson’s office added, “The outside firms assumed all the financial risk up front with no risk to the state if they lose the case. Additionally, these firms had worked on this case for years with no pay.”

This story was originally published September 10, 2020 at 5:11 PM.